Liberal economists to Bernie Sanders: Your economic plan is unrealistic.

a reply to: BatheInTheFountain

I know that nothing changes your opinions, but for those that want to know.

Jamie Galbraith Scores a One-Two Punch KO on the Gang of 4 and Krugman

Alas, Krugman ran into Jamie Galbraith, who is not susceptible to Paul’s edicts of intimidation. Jamie’s piece is wonderfully concise and should be savored in its entirety. But here are the two key takeaways. Jamie destroyed the Gang of 4 and Krugman. Jamie made two simple points. First, Friedman is a supporter of Hillary Clinton, not Bernie. That means there is every reason to believe he did not engage in “voodoo” economics as Krugman charged in order to help Bernie. It also means that Paul’s demand: “Sanders needs to disassociate himself from this kind of fantasy economics right now” is bizarre. Why would Sanders need to disassociate himself from a Hillary supporter?

Second, Friedman’s study is utterly conventional in terms of the macro models that Krugman has been praising for years in his column. The results he calculates, that Krugman dismisses as “fantasy” and “voodoo” are in fact the normal product of the normal models Krugman and the Gang of 4 rely on. Friedman, Jamie, and I all have many doubts about those models, but not Krugman and the Gang of 4. Why does the standard model generate such powerful results for employment and growth? It does so because Bernie’s plan to spur the economy is far larger than current policies or anything program to spur the economy supported by Hillary. As Jamie phrases it:

What the Friedman paper shows, is that under conventional assumptions, the projected impact of Senator Sanders’ proposals stems from their scale and ambition. When you dare to do big things, big results should be expected. The Sanders program is big, and when you run it through a standard model, you get a big result. That, by the way, is the lesson of the Reagan era – like it or not. It is a lesson that, among today’s political leaders, only Senator Sanders has learned.

source

originally posted by: DBCowboy
How is it that economists can't agree on a system that works?

Trickle up, trickle down, socialist, capitalist, Keynesian, . . . . . . ?

I understand that there are different models and all, but is there one specific article that provides data instead of opinion?

I only ask because anyone who is for Sanders is disagreeing with the economist, they aren't disagreeing with the data.

Well, economics is little more than voodoo. They literally just make up math formulas based on whatever factors sound good at the time and compare the results.

The big problem though is that most economists seek to explain things using pure logic, but humans aren't logical and neither are their purchasing decisions. Therefore no system based on logic can actually properly model the economy.

originally posted by: Aazadan

originally posted by: DBCowboy
How is it that economists can't agree on a system that works?

Trickle up, trickle down, socialist, capitalist, Keynesian, . . . . . . ?

I understand that there are different models and all, but is there one specific article that provides data instead of opinion?

I only ask because anyone who is for Sanders is disagreeing with the economist, they aren't disagreeing with the data.

Well, economics is little more than voodoo. They literally just make up math formulas based on whatever factors sound good at the time and compare the results.

The big problem though is that most economists seek to explain things using pure logic, but humans aren't logical and neither are their purchasing decisions. Therefore no system based on logic can actually properly model the economy.

Well said.

I remember how one of my economics teachers tried to describe predicting and controlling an 'economy'...

Imagine driving a car. The accelerator and brakes are... marginal. The steering wheel has a 20 second delay, your speedometer is off +/- 20% and you are wearing binoculars. Now steer through a bunch of S-curves. Good luck!

originally posted by: TheBandit795
Not that this takes only the tax plans into consideration, not government spending. Because if it does they would all probably be negative.

I disagree with Trumps numbers on that. Ultimately though, your graphs don't say anything. Taxation and spending must be looked at together. Of course the economy will shrink if you have high taxes and just siphon money out of everyones pockets. That's not what's happening though because of the spending side of the equation. Every dollar taken in taxes goes back out to the people performing government contracted work, and from there it reenters the economy. What this essentially means is that taxes are completely neutral on your wallet because you get back everything taken as money circulates.

Krugman?! He is a bankster sell-out.

originally posted by: AazadanEvery dollar taken in taxes goes back out to the people performing government contracted work, and from there it reenters the economy. What this essentially means is that taxes are completely neutral on your wallet because you get back everything taken as money circulates.

IMO that's a myth. A lot of that tax money goes to waste on bureaucracy, wars, handouts and paying interest on loans that where created out of nothing.

originally posted by: TheBandit795
IMO that's a myth. A lot of that tax money goes to waste on bureaucracy, wars, handouts and paying interest on loans that where created out of nothing.

All of which goes back into the economy. Bureaucrats have paychecks, wars pay soldiers and buy equipment, handouts are spent on things like food and rent, interest is paid to bond owners and then respent.

a reply to: Aazadan

Here are examples of how the U.S. government wasted money last year.

www.thefiscaltimes.com...

Wars destroy much more than any economic impulse they could have in the economy. Charities are much more efficient than government handouts, and interest is paid primarily to central banks. They are huge bond holders as you can see in this video.

originally posted by: TheBandit795
a reply to: Aazadan

Here are examples of how the U.S. government wasted money last year.

www.thefiscaltimes.com...

Wars destroy much more than any economic impulse they could have in the economy. Charities are much more efficient than government handouts, and interest is paid primarily to central banks. They are huge bond holders as you can see in this video.

Every single one of those wastes of money (and I would argue that most of them weren't wastes) went right back into the economy. Not a single one of those companies or the government took the cash and made it cease to exist. It all ultimately gets spent on peoples paychecks, and those people go out and spend that money. Taxation is nothing more than directing money before it recirculates. It doesn't change the amount in the pool.

Let me use an analogy of the worlds oceans, because money moves very similarly:

The oceans are the money available to consumers, evaporation from the oceans is taxation, those taxes then get spent on various projects in the form of rain. Those projects then funnel the money back to tax payers through runoff, rivers, and so on, and in the end it all winds up in the ocean once more.

a reply to: Aazadan

I disagree. It does not all get spent on people's paychecks. Lots of these things (such as the f-35) get destroyed or are used to destroy. Destruction does not put money into people's pockets.

As for your ocean analogy. The oceans are created by the consumers. The private sector. They create products, they create value and they do it in a more efficient way than the government ever can. They can save and use those savings to invest or startup businesses and create more products.

As for the rain, there are damns and other blockages which ensure that that water does not end up back in the ocean. In fact, lots of it evaporates on land.


Here's another analogy:

JaoT97f573M

I forgot about these...


Stimulus Surprise: Companies Retrench When Government Spends

A reply to the attempted rebuttal of the above article

“Government Spending Brings Jobs and Prosperity”

The Impact of Government Spending on Economic Growth

originally posted by: TheBandit795
a reply to: Aazadan

I disagree. It does not all get spent on people's paychecks. Lots of these things (such as the f-35) get destroyed or are used to destroy. Destruction does not put money into people's pockets.

As for your ocean analogy. The oceans are created by the consumers. The private sector. They create products, they create value and they do it in a more efficient way than the government ever can. They can save and use those savings to invest or startup businesses and create more products.

As for the rain, there are damns and other blockages which ensure that that water does not end up back in the ocean. In fact, lots of it evaporates on land.


Here's another analogy:

JaoT97f573M

When the F35 gets destroyed new jobs are created. When the F35 is used to destroy new jobs are created (usually American jobs if we're also rebuilding the place). It's part of the MIC that fuels a huge chunk of our entire economy now that defense spending is effectively welfare spending.

a reply to: Aazadan

a reply to: TheBandit795

When items don't need to be replaced, we eventually run out of things to buy. It's the same reason planned obsolescence is the inevitable result of capitalism. People eventually undertake very inefficient methods of production in order to always have work to do.

a reply to: Aazadan

Well I guess you don't understand. What those videos are talking about. Let's leave it at that.

a reply to: TheBandit795

I understood it fine (though to be fair I only watched 2 of the 3). They're making the claim that spending is going to happen regardless and that society is better off if it spends that money creating new stuff rather than replacing old stuff.

The problem is that while that makes sense, it doesn't work under capitalism. Capitalism has a fundamental flaw, it rewards the person who can make a living doing the same job over and over again. Due to the surplus of resources the system produces the quality of products declines in order to use up those resources. You can't sell people new goods forever because they eventually run out of stuff to buy, you have to make things wear out, break, or get destroyed in order to replace what was there. This keeps everyone busy.

a reply to: Aazadan

I can't agree with that at all. Sorry.